We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The Zacks Analyst Blog Highlights: Microsoft, Nvidia, Tesla and Adobe
Read MoreHide Full Article
For Immediate Release
Chicago, IL – July 8, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Microsoft (MSFT - Free Report) , Nvidia (NVDA - Free Report) , Tesla (TSLA - Free Report) and Adobe (ADBE - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
Don't Forget: Buy Low, Sell High
The US's "V-shape" recovery appears to have come to a pause as daily COVID-19 cases surge, and states begin to roll back reopening. The bulls and the bears are duking it out between S&P 500's 3,000 and 3,200.
Overzealous investors and analysts are driving the equity market rally. Analysts are continually upgrading their price targets as the best-positioned tech stocks hit higher highs seemingly daily. Is their backing to these upgrades, or is it just because these stocks keep blowing past these analysts' old targets?
Buying low and selling high is the idiom of every investor, but what are we defining as high? For short-term investors, we have unquestionably hit this "high" with many stocks trading in the 99th percentile of their last decade of valuations. I'm looking at these analysts' price target upgrades with a grain of salt in the short-term (though they may hold weight over a longer time horizon).
Someone Needs to Start Pulling Profits
The markets are frothy, at the very least, and I think we could be in for a rocky summer. The stretched stock market is due for a reality check.
When will the market start pulling profits?
Timing is challenging in any market condition, and the unprecedented economic uncertainty we are facing today adds to the complexity. I am most concerned about investors and traders selling off Q2 earnings. Investors are prone to pulling profits once they see what they wanted in a quarter, especially when they have accumulated some of the gains we have seen in the tech sector this past quarter.
I am not pulling profits in the traditional sense but instead buying puts to hedge my gains. My most prominent winners of 2020 are likely similar to yours: Microsoft, Nvidia, Tesla, Adobe etc. The tech stocks that are expected to drive the next decade's equity market.
I don't want to sell out of my positions because I still believe in these company's long-term potential, but I also don't want to lose the gains that I have accumulated over the past 3.5 months. Considering how heavily weighted my portfolio is in tech, I want to choose a hedge that covers that segment.
Invesco's Nasdaq 100 ETF (QQQ) is the perfect way to hedge my entire portfolio with just a few contracts. I am looking at puts with an August 21st expiration, which should provide me with the Q2 earnings season hedge that I need.
My sell level on QQQ puts is when the ETF hits $240 or the S&P 500 hits 3,000, whichever comes first. Of course, you need to be flexible if the options turn against you and cut losses if the economic narrative shifts (significantly) in a bullish way.
Keep in mind that options are a very complex asset class and can present a lot of risk when used incorrectly.
The Takeaway
I'm not overly bearish or bullish in this market, but I think a correction is imminent. The tech euphoria will fade this summer, and another buying opportunity will present itself. I am not advocating that you sell everything but be cautious and consider taking profits on some of your more exuberant gains.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
This young company’s gigantic growth was hidden by low-volume trading, then cut short by the coronavirus. But its digital products stand out in a region where the internet economy has tripled since 2015 and looks to triple again by 2025.
Its stock price is already starting to resume its upward arc. The sky’s the limit! And the earlier you get in, the greater your potential gain.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
The Zacks Analyst Blog Highlights: Microsoft, Nvidia, Tesla and Adobe
For Immediate Release
Chicago, IL – July 8, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Microsoft (MSFT - Free Report) , Nvidia (NVDA - Free Report) , Tesla (TSLA - Free Report) and Adobe (ADBE - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
Don't Forget: Buy Low, Sell High
The US's "V-shape" recovery appears to have come to a pause as daily COVID-19 cases surge, and states begin to roll back reopening. The bulls and the bears are duking it out between S&P 500's 3,000 and 3,200.
Overzealous investors and analysts are driving the equity market rally. Analysts are continually upgrading their price targets as the best-positioned tech stocks hit higher highs seemingly daily. Is their backing to these upgrades, or is it just because these stocks keep blowing past these analysts' old targets?
Buying low and selling high is the idiom of every investor, but what are we defining as high? For short-term investors, we have unquestionably hit this "high" with many stocks trading in the 99th percentile of their last decade of valuations. I'm looking at these analysts' price target upgrades with a grain of salt in the short-term (though they may hold weight over a longer time horizon).
Someone Needs to Start Pulling Profits
The markets are frothy, at the very least, and I think we could be in for a rocky summer. The stretched stock market is due for a reality check.
When will the market start pulling profits?
Timing is challenging in any market condition, and the unprecedented economic uncertainty we are facing today adds to the complexity. I am most concerned about investors and traders selling off Q2 earnings. Investors are prone to pulling profits once they see what they wanted in a quarter, especially when they have accumulated some of the gains we have seen in the tech sector this past quarter.
I am not pulling profits in the traditional sense but instead buying puts to hedge my gains. My most prominent winners of 2020 are likely similar to yours: Microsoft, Nvidia, Tesla, Adobe etc. The tech stocks that are expected to drive the next decade's equity market.
I don't want to sell out of my positions because I still believe in these company's long-term potential, but I also don't want to lose the gains that I have accumulated over the past 3.5 months. Considering how heavily weighted my portfolio is in tech, I want to choose a hedge that covers that segment.
Invesco's Nasdaq 100 ETF (QQQ) is the perfect way to hedge my entire portfolio with just a few contracts. I am looking at puts with an August 21st expiration, which should provide me with the Q2 earnings season hedge that I need.
My sell level on QQQ puts is when the ETF hits $240 or the S&P 500 hits 3,000, whichever comes first. Of course, you need to be flexible if the options turn against you and cut losses if the economic narrative shifts (significantly) in a bullish way.
Keep in mind that options are a very complex asset class and can present a lot of risk when used incorrectly.
The Takeaway
I'm not overly bearish or bullish in this market, but I think a correction is imminent. The tech euphoria will fade this summer, and another buying opportunity will present itself. I am not advocating that you sell everything but be cautious and consider taking profits on some of your more exuberant gains.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
This young company’s gigantic growth was hidden by low-volume trading, then cut short by the coronavirus. But its digital products stand out in a region where the internet economy has tripled since 2015 and looks to triple again by 2025.
Its stock price is already starting to resume its upward arc. The sky’s the limit! And the earlier you get in, the greater your potential gain.
Click Here, See It Free >>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
http://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performancefor information about the performance numbers displayed in this press release.